December 21, 2022
Summary of the Circulars issued by BSE and NSE on 20/12/2022
Revised Standard Operating Procedure (SOP) for application filed w.r.t. Scheme of Arrangements under Regulation 37 and 59A of LODR Regulations, 2015
These circulars are integrated in our free-to-use website ca2013.com.
Further to the recent amendments made to the provisions pertaining to draft scheme of arrangement filed with stock exchanges under Regulation 37 and 59A of LODR Regulations, 2015, NSE and BSE have issued revised SOPs to be followed by such listed entities.
Key highlights and timelines as per the revised SOP are as follows:
1. Application for NOC: The Scheme of Arrangement seeking Stock Exchange’s NOC under LODR Regulations, 2015 shall be submitted to the Exchange along with all the documents as per the Exchange Checklist within 15 working days of board meeting approving such draft scheme of arrangement. In case the application is not submitted within 15 working days, the company shall take fresh approval from its board considering fresh financials, valuation report, etc.
2. Period of Financials and Valuation Approach: At the time of submission of the application to the Exchange(s) under the said regulations of SEBI LODR, the Audited Financials of last 3 years (financials not being older than 6 months) of unlisted company(ies) involved in the Scheme of Arrangement has to be submitted. Also, the aforesaid audited financials shall be considered for preparation of Valuation Report by the valuer under Income Approach. The audited financials considered for valuations, other than Income Approach, should not be older than 3 months. The board shall consider the scheme of arrangement within 7 working days of the issuance of valuation report.
3. For Listed Entity having their specified securities as well as NCDs/NCRPS listed, a single filing of the draft scheme of arrangement in terms of Regulations 37 and Regulation 59A of SEBI LODR Regulation 2015 shall be submitted under Regulation 37 wherein additional documents, as required for Debt Listed company shall also be attached.
4. Response to queries raised by the Stock Exchanges: Where the application is incomplete or any clarification needed or any material inadequacies/non-compliance with the SEBI Circulars are observed in the documents by the Exchange, the scheme shall be returned to the Company for necessary rectifications. The Company shall file its response within 7 working days from the receipt of such queries, failing which, any fees paid by the Company for processing of the application shall be forfeited by the Exchange/Regulator and the scheme documents shall be returned to the company.
Where the applicant is a NCDs/NCRPS only listed entity, then it shall ensure that it submits its response at the earliest so that it meets the requirement of “maximum number of days for providing the ‘No-Objection’ Letter to SEBI shall not exceed thirty days from the date of receipt of the draft scheme of arrangement”.